Beijing is trying to hold onto foreign business, while Western companies are looking for ways to reduce their dependence on China’s supply chains.
On Tuesday, Premier Li Qiang said China is willing to build closer ties with “all countries.”
He made the comment during the “China International Supply Chain Expo” China’s first-ever Expo of this nature.
Right now, foreign investment in China is at a historic low. Businesses like Apple are moving chunks of their manufacturing to other Asian countries. That’s over fears like tensions between Beijing and Washington, tightening regulations in China, and an unfair playing field compared to Chinese state-owned companies.
The de-risking process started quietly in 2018 after the Trump administration imposed trade tariffs on Beijing. And later became a trend after the pandemic hit China’s economy hard. Many foreign companies operating in China say market demand in the country hasn’t returned to pre-COVID levels.
China Launches Probe Into Wealth Manager ZEG
New troubles are on the horizon for China’s financial sector.
Beijing police launched a probe investigating one of China’s biggest financial conglomerates: ZEG.
The wealth management company told investors last week that it’s “severely insolvent” citing $64 billion in debt.
Experts predict investors may lose at least three-quarters of their money.
The news is fueling concerns that China’s real estate crisis is spilling over into the financial sector.
Three out of four of China’s biggest property developers are buried under massive debt — to the tune of hundreds of billions of dollars for each of them.
ZEG has had sizable exposure to the real estate sector.
Beijing authorities suspect the company of, quote: “illegal crimes,” but haven’t elaborated.
Evergrande Subsidiary Sues Parent Company
A new lawsuit against Chinese company Evergrande. This time, the plaintiff is a subsidiary of Evergrande—a company called Jin-bi Property.
The case is related to about $280 million of guarantees Jin-Bi Property gave a bank. That bank later seized the assets.
Jin-bi property believes it happened due to a malfunction within the parent company Evergrande and a few others.
China’s Shein Files to List on US Stock Market
Clothing company Shein is gearing up to enter the American stock market. It’s expected to list as early as next year. according to sources familiar with the matter.
The fast-fashion brand has already filed to go public in the United States and three leading institutions in the financial sector have been hired on the company’s initial public offering or IPO.
The company was founded in China, later moving its headquarters to Singapore. It’s valued at more than $60 billion, but its business model has been at the center of industry controversy.
Especially about the manufacturing of clothing.
Shein partners with clothing makers in China and sells those products through its online store in other countries. The United States is one of its biggest markets.
The brand ships its goods directly to shoppers in individually addressed packages avoiding both warehouse fees and U.S. import taxes. Allowing it to offer customers dirt-cheap prices.
Shein is also facing a series of claims, from stealing copyrighted designs, to using cotton from Xinjiang made with forced labor. Xinjiang is home to the Uyghur ethnic minority.
Washington says at least one million Uyghurs have been put in forced labor camps under the Chinese communist regime.